Question

1. Oceanview's inventory consists primarily of boats and involves a comparatively small number of inventory items. How would inventory observation and test count tracing tests differ if the client has a large number of inventory items and the client did not have a detailed list of inventory hand at the time of the inventory observation?

Answer 1

Ocanviews running business related with sea shores. Inventories are Boat. It is eary for making observation about book keeping of stores and counting if the items are small in quantity but it completed planned task to accomplish when invemtory items are large in number and more challenging when their is no detailed list of inventory.

So in the Abov organsiation Ceanview's holding large varities and number of inventories and no proper listis as on date so following tricks as on hand can be used to trace out the verification for assuring the proper recording:

1. Material Item: It is advisable to focus on material items, this information is easily availabe from Oceanview Management. so then testing of material item even though list is not maintained will help organisation to assurity to some extent.

2. Pareto Analysis: One of the best testing technique pareto analysis can be utilised. Which is based on  80 : : 20 fact. It states that Oceanview Inventories items which may be 20% in quantity but contributing 80% of the Inventory costing. So with this testing technique, Inventory which falls in 20% list to be tested accordingly.

3. Rotational Inventory testing: Where Inventory items are large in list and quantity then it is advisable to count on rotation basis over the period of time, it give the essence of control over the employees keeping store of the items.

4. Try to maintain value from Sale - purchase and opening balane trick method to estimate the inventory list and its measurement.

From above it can be concluded that , testing technique changes with the change in inventory keeping. Here in the oceanview no proper maintence is challenging but never leads to non possibility of the inventory verification.

Oceanview's inventory consists primarily of boats and involves a comparatively small number of inventory items. How would inventory observation and test count tracing tests differ if the client has a large number of inventory items and the client did not have a detailed list of inventory hand at the time of the inventory observation?